Alabama Administrative Code
Title 400 - STATE OIL AND GAS BOARD OF ALABAMA
GOVERNING COALBED METHANE GAS OPERATIONS
Chapter 400-3-2 - PERMITING OF WELLS
Section 400-3-2-.05 - Change Of Operator

(1) The operator of record shall immediately notify the Supervisor in writing of any agreement or other transaction, by which a new operator is to be designated for a well or wells, including all associated production, processing, injection, plant, and gathering line and pipeline facilities, and all other equipment associated with such well or wells. Such notification shall include, but not be limited to, identification of the proposed new operator and a list of wells and all associated facilities and equipment.

(2) Within sixty (60) days of the effective date of any agreement or other transaction causing a change of operator, any person or persons desiring to become the new operator of a well or wells must submit for approval to the Supervisor Form OGB-1E, Application for Change of Operator. A single Application for Change of Operator, Form OGB-1E, may be filed requesting a change of operator for multiple wells, facilities, and equipment. Form OGB-1E shall be signed by both the operator of record or present operator and the proposed new operator, with both parties applying to change the operator for the well or wells, including all associated production, processing, injection, plant, and gathering line and pipeline facilities, and all other equipment associated with such well or wells.

(3) In the application for Change of Operator, Form OGB-1E, the new operator shall acknowledge that it has ownership or control of one hundred percent (100%) of the rights to drill and produce with respect to oil and gas underlying the lands comprising the unit assigned to the well or wells in which a change of operator is requested. Further, the Application for Change of Operator (Form OGB-1E) shall be accompanied by a bond on Form OGB-3 or OGB-4, whichever is appropriate, if such requirement has not been fulfilled as prescribed in Rule 400-2-2-.04, relating to Bond; an Operator's Certificate of Compliance and Authorization to Transport Oil, Gas, or Condensate from Well on Form OGB-12 if required by Rule 400-2-7-.01; an Operator's Certificate of Compliance for Operations Involving Hydrogen Sulfide on Form OGB-24 and other sour gas filing requirements prescribed in Rule 400-2-8-.04 if required by Rule 400-2-8-.04; and an Organization Report on Form OGB-5, if not already on file with the Board and current.

(4) In the event that the new operator is uncertain whether it owns or controls one hundred percent (100%) of the rights to drill or produce, then the new operator may petition the Board to delay filing of the Application for Change of Operator, Form OGB-1E. The Board may, after notice and hearing for good cause, delay the filing of the Application for Change of Operator, Form OGB-1E, for a period of up to 120 days thereby allowing the new operator time to ensure that the operator owns one hundred percent (100%) of the ownership rights or to force pool and integrate the interests in the unit or units assigned to the well or wells for which a change of operator is requested. The Board, on the petition by the new operator after notice and hearing for good cause, may delay for an additional period beyond 120 days the filing of the Application of Change of Operator, Form OGB-1E.

(5) n addition to the filing of an Application for Change of Operator on Form OGB-1E as required in section (2) and the additional filing requirements in section (3), filing requirements for Class II injection wells shall include, an Application for Permit to Inject Fluids on Form OGB-1C, an Affidavit of Ownership or Control, Underground Injection Control on Form OGB-2C, an affidavit of source, and a current analysis of fluids being injected.

(6) n addition to the filing of an Application for Change of Operator on Form OGB-1E as required in section (2) and the additional filing requirements in section (3), filing requirements for change of operator for a natural gas storage operation shall include an Application for Permit to Inject Storage Gas on Form OGB-1D, and an Affidavit of Ownership or Control, Natural Gas Storage Operations on Form OGB-2D.

(7) f the request for a change of operator pertains to a well which has not been drilled or completed, and the new operator wishes to drill and complete said well in accordance with the casing and cement, mud, and blowout prevention programs and report of shallow hazards filed as a part of the permit application, the new operator must submit a written statement to the Supervisor stating that it has reviewed the above mentioned information and will drill and complete the well in conformance with those programs. In such case, the refiling of the casing and cement, mud, and blowout prevention programs and report of shallow hazards documents may not be necessary.

(8) rior to the Supervisor's approval of an Application for Change of Operator on Form OGB-1E, the current operator of record must be in compliance with the Board's submission requirements for forms and geologic data, such as logs, cuttings and cores for the subject well(s).

(9) he Supervisor may waive any filing requirements, or request additional information, associated with an application for change of operator.

(10) he Application for Change of Operator, Form OGB-1E, shall become effective upon approval by the Supervisor. Until such approval, the current operator of record shall be responsible for ensuring continued compliance with all applicable laws, and all rules, regulations, and orders, including special field rules, promulgated by the Board.

(11) When the operator is a corporation, limited liability company, limited partnership, or general partnership that is not publicly traded and when the majority of the ownership of the entity designated by the Board as operator changes, as a result of one or more transactions within a six-month period then the operator shall immediately notify the Supervisor in writing that the majority of the ownership has changed. Within sixty (60) days of the effective date of such change in ownership, the operator shall file a new Organization Report on Form OGB-5 showing the new ownership.